Canberra was one of just two capital cities where rent prices fell in 2023, yet it remains the second most expensive place to rent a home in.
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Median weekly rents fell 1.9 per cent in Canberra throughout last year, property data analyst CoreLogic has revealed.
Hobart was the only other capital city to experience a rent value decline, down 3.5 per cent for the year.
The rest of the capitals saw significant growth in rents, led by a 13.4 per cent increase in Perth.
There was a 9.8 per cent annual increase in rents across the combined capitals, while rents in the combined regions were up 4.3 per cent.
With a median weekly rent of $651 across all housing types, Canberra came in behind Sydney ($745) as having the most expensive rents of the capital cities.
CoreLogic head of research Australia Eliza Owen said while ACT rents were falling, the decline had followed an "extensive increase" in rents during the 2010s.
The data showed Canberra rents have fallen 3.3 per cent since peaking in mid-2022.
But the rate of decline was easing.
The decline in Canberra house rents had slowed from a 4.5 per cent fall in the 12 months to June 2023, to a 2.6 per cent decline in the year to December.
"If we assume a continuation of that trend, values could flatten out in the rental market potentially halfway through the year for houses," Ms Owen said.
Unit rents were already stabilising, she said.
Looking at the national figures, Ms Owen said several factors since the beginning of COVID-19 had contributed to "unusually large rent rises".
This included a notable decline in the average household size, "meaning more dwellings were needed even when population growth was close to zero in 2021", she said.
A "rapid increase" in the population from late-2022 and dampened investor activity at the beginning of the interest rate rise cycle had also contributed to broad rental rises.
There were long-term factors too. A reduction in social housing supply and a declining rate of home ownership had fuelled demand for rental properties across Australia, Ms Owen said.
Despite the decline in rent values, Canberra remains an expensive place to be a tenant.
Adding cost-of-living pressures to the mix, Canberra renters may look to form larger households to bring their weekly costs down in 2024, Ms Owen said.
"Rental costs still have seen a substantial upward adjustment since the onset of the pandemic, so that might entice more people to sharehouse," she said.
![Canberra rents are still the second most expensive of the capital cities. Picture by Elesa Kurtz Canberra rents are still the second most expensive of the capital cities. Picture by Elesa Kurtz](/images/transform/v1/crop/frm/146508744/870fbfe7-d521-4d95-8d7d-696f11613cb6.jpg/r0_258_4009_2512_w1200_h678_fmax.jpg)